Consider the following 1 Currency with the public 2 Demand depos...........

Economic Affairs Types of Banks and Banking

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Consider the following:

1. Currency with the public

2. Demand deposits with banks

3. Total post office deposits

4. Time deposit with banks

Which of these are included in Broad Money (M3) in India?

1 and 2

1 and 3

2 and 3

1, 2 and 4

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Explanation:

Broad money is the most inclusive method of calculating a given country's money supply. The money supply is the totality of assets that households and businesses can use to make payments or to hold as short-term investments, such as currency, funds in bank accounts and anything of value resembling money. The formula for calculating money supply varies from country to country, but broad money is always the farthest-reaching; narrow money includes fewer elements in the calculation.
M3 is a measure of the money supply that includes M2 as well as large time deposits, institutional money market funds, short-term repurchase agreements and other larger liquid assets.